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8 Simple Ways To Boost Your Credit Rating In Canada : Net Worth Update December 2018 (-1.66%)

Credit Score Canada


The great thing about your credit rating is that you can build or rebuild it at any time especially since our lives can be wonderful one minute and fall apart the next.

A few things come to mind when I think of this, employment, relationships and newcomers to Canada.

Today I want to talk about improving your credit rating or credit score and ways you can easily do this.

For those of you new to credit in Canada or want to understand it better one thing you need to know is that a credit report and a credit score or credit rating are two different things.

Consider your credit report to be your report card from elementary school but the part that explains the marks you were given, so a history.

A Credit Score on the other-hand is the actual mark you get or score and in this case, it is three numbers long. (see photo below)

Since it’s the beginning of 2019 and this is our final net worth post for 2018 I thought we should talk about a credit rating in Canada and how you can improve yours.

Improving your credit rating in Canada boils down to one thing and one thing only, responsible credit use.

Canadian Credit Reporting Agencies

There are two major credit bureaus in Canada that are the hub of all things related to your credit rating, Trans Union of Canada and Equifax Canada Co.

Both these credit bureaus are governed by Federal and Provincial laws in Canada are allowed to store and maintain credit information on Canadian consumers.

The use of this information is by those members of the Canadian credit reporting agency who need to find out how reliable YOU are with your money.

The main members of the Canadian credit reporting agency according to Equifax are retailers, banks, finance companies, auto leasing companies, and credit card companies.

The above agencies maintain a steadfast relationship with credit reporting agencies and will report the way you maintain your credit and payment activities.

Other sources of the information contained in your credit report can include public records from courthouses across the country and collection agencies.- Equifax Canada

Trans Union Canada is another great source for finding your credit score and getting your credit report.

Why you should care about your credit rating and credit report

There are four types of credit rating warriors;

  1. I don’t care about my credit rating or even know what one is.
  2. I need to improve my credit rating
  3. I need to build a credit rating
  4. I need to maintain my credit rating

All four of these credit rating warriors bring something different to the finance world and are targets from creditors, employers, lenders from mortgage companies to rental applications.

Your credit rating is not just any number it’s an important number whether you have debt or not.

In fact just because we are debt-free doesn’t mean that we have an immaculate credit rating.

It’s important to maintain some form of available credit (ex: credit card credit) on your credit report that you use to show lenders that you are reliable when it comes to the way you handle our money.

Here’s a scenario;

What if we plan to sell our house in a few year’s time to buy a bigger house?

For us this might mean a visit to a mortgage broker or bank for a loan unless of course, we’ve saved up the cash.

Moving up in square footage is never a cheap endeavor and not everyone has huge amounts of cash sitting in the bank.

Although our mortgage is paid in full that might not mean anything to the lender if our credit score has tanked because we haven’t maintained it over the years.

In essence the lender needs something to evaluate otherwise they won’t hand over their money. Would you?

Allowing credit to appear on our credit report and using our credit cards even if just a little and paying it off on time shows the creditors that we are reliable.  That’s really all they want to see.

They don’t care how much money you have or little debt you don’t have.  They want to see action and your credit report is like a bread trail from the minute you allow anyone in a position to obtain your credit report.

You are in control of your credit report which is why it’s critical that you access it at least once a year to review what’s on it.

Even simple errors can cause your credit score to dip and if you find an error you must report it to the credit bureau to review and then follow-up to make sure it has been taken care of.

Your credit report may show a debt or a bill that you were late paying but in fact you were not late paying it.

It may seem harmless skipping a payment if you are short on cash but any time you don’t pay it gets documented and follows you like a bad smell.

Once you escalate a review of your credit report it’s important to view your credit report a second time to review any changes that have happened since.

Trust me it will be worth it.

What wants access to your credit report?

Not many people give thought to how their credit rating can impact their life but it can in significant ways especially newcomers to Canada like I was.

Just about anyone that is going to lend you money or something that requires a legal credit inquiry will affect not only your credit rating because they are seeking information but how the information is used.

Are you reliable?

When your credit history has to be viewed from agencies such as vehicle rental/purchase, credit card applications, landlord application, employment offers, lenders, banks all they want to know if you are reliable.

Anything such a bankruptcy, home or business foreclosures, secured loans, garnished wages or collections sticks around for a minimum of 6 years.

Inquiries account for 10% of your credit rating also called “hard pulls” or “hard hits” where you might be applying for credit or a new credit card.

These inquiries may last up to 3 years on your credit report which is also called, “active seeking”.

This means the person may be in financial hardship but not always but this is still a hard hit for Canadians.

What this means is that you will see just who accessed your credit report when you read it and so will everyone else who reads it.

You also must first give consent for there to be an inquiry so keep that in mind when you are signing documents or verbally agreeing to the inquiry.

Your credit score does not take into account requests a creditor has made for your credit file or credit score in order to make a pre-approved credit offer, or to review your account with them, nor does it take into account your own request for a copy of your credit history. These are some examples of “soft inquiries” or “soft pulls” of your credit.- Equifax Canada Co.

If your unpaid bills make their way to a collection agency you can bet that will impact your credit rating.

Pay your bills on time.

The term ‘reliable’ holds a heavy grip on our finances especially when you need something the most.

Oh, and before you think you are let off the hook with a credit proposal or credit counselling that will also stain your credit report for a minimum of  3 years before it goes away.

In all honesty it makes sense because lenders need to protect themselves and if your credit rating stinks you need to work on improving it.

Sounds overwhelming, I know trust me because when I moved to Canada 10 years ago I had no idea about how to use Canadian currency let alone what a credit rating was.

These days my credit report and credit score are over the 660 threshold which most lenders want to see so I’m happy with the work I’ve put into building a credit rating in Canada.

Credit Score chart Canada

Canada's Credit Score Range
Canada’s Credit Score Range

What is a good credit score?

The low-end of the credit score scale is 300 where the higher end is 900. Being somewhere in the middle is ideal around 660.

How is your credit score calculated?

I’m sure this is a burning question that many Canadians have because even I had it when I was learning about credit in Canada.

When your credit score is calculated there are a few main factors that will be reviewed and impact your credit rating according to Equifax Canada.

  1. Number of inquirers into your credit file 10%
  2. The length of your credit history 15%
  3. Public Records 10%
  4. Used credit vs. Available credit 30% (this is a big one)
  5. Payment history- 35% (Again, another big impact to your credit score)

You may find different credit scores from various reporting agencies only because they have different ways of scoring you and lenders typically only go to one credit bureau when looking for info on you.

Simple ways to improve your Credit Rating/Credit Score

  1. Pay your bills on time and lower your credit balances. Pay off bills that are past-due. (FREE printable Debt Repayment Plan)
  2. Order your credit report, review and correct any errors by reporting them (How to order your Credit Report in Canada for Free)
  3. Get a secured credit card to build or improve your credit (that’s what I did)
  4. Use your credit often and pay it but also watch your credit card balances (using too much and not paying it is a no-no)
  5. Set up automatic payments (this is great especially if you miss payments by forgetting to pay them)
  6. Avoid applying for new credit cards for the perks (creditors will look at this as a potential red flag)
  7. Set up Canada Post mail redirection when you move if you still request paper bills or change your address online via a portal or call all of your creditors to update your information. This will avoid bills going unpaid because they didn’t make it to your mailbox and this includes email addresses and phone numbers as well.
  8. Document your bills so you know when they should be arriving and when you need to pay them off. If you don’t get a bill in the mail then go online and check. A postal interruption is a good example.

Bottom line is RISK

At the end of the day all creditors want to know is whether you are reliable paying your bills even if your credit rating slightly differs between reporting agencies.

Discussion: What other ways can you think of to improve your credit rating?

Our Net Worth December 2018

December 2018 Net Worth Losses and Gains

What happened with our portfolio this month?

Just when you thought you were moving up you get crushed again and the markets disappointing once again however we are not worried.

We may have dropped $17,418.45 but we are confident we will see that rise back up in 2019 and then some.

The year has been kind to us overall with plenty of financial gains mostly from our RRSP and TFSA accounts not to mention the increase in value of our home.

We haven’t increased it on the net worth chart above for years thought but we can almost double that if we were to sell today.

The reason for that is because we are being safe with the way the housing market bounces around.

Ideally moving to a house  on a bigger plot of land in a far less expensive community would be our final destination home.

I don’t know what 2019 will hold for us but we will see renovations hitting our net worth hard as I work to get as much as I can done around here.

This is reflected in the savings we have in the bank which is why it’s still there and we’re still contemplating swapping our term life insurance policy in for something a bit more permanent with investments for the long-haul.

If you had $100,000 in the bank what would you invest it in and why?

What would you do with your term life insurance? Share your comments below as I’d be interested to hear what you have to say.

Lastly, do you still want to see our net worth update post in 2019?

If yes, leave us a comment so we know you are out there and reading this otherwise we may consider dropping it moving forward since we’ve already hit our million dollar journey mark.

Happy New Years to all,


Understanding Net Worth

What Does Individual Net Worth Mean?

Net Worth is a snap shot of your financial health sort of like a picture or debt to net assets. In simple terms it’s a total of the value of your assets minus your liabilities.

We credit the growth of our net worth due to patience, perseverance, using a monthly budget and not giving up.

Your numbers may go up and down but don’t let the numbers scare you rather understand why and move on.

If you would like to use our budget I offer a FREE downloadable budget which I created and that you can use at home just like we do. I don’t charge for it because I want you to save money not spend more!

There are tonnes of other free printable lists offered at Canadian Budget Binder to help you achieve some of those financial goals and build your net worth.

Calculate Your net worth

Do you know how to calculate your own Net Worth? We like to calculate our net worth every month so we know if we are still on track.

Some people calculate it yearly or quarterly but it’s up to you and how informed you want to stay when it comes to your financial health.

Net Worth is only an estimate and not everyone uses the same type of figures to tally it up.

Some of you may not include vehicles like we do or leave out assets inside the home like we have.

You might be that person that believes that your house should be excluded.

It depends on what you want to calculate or what you can sell today and make money on for tomorrow.

Figuring out net worth is fairly easy as long as you know your personal numbers or monthly finances which means you need to do your homework.

Net Worth is simply adding up all your assets (what you own) then taking away your liabilities (what you owe) which will give you a net worth number.

Understanding your net worth will help you determine if you are on track to meeting or beating your personal financial goals. It doesn’t get any easier than that.

How to Determine Net Worth?

Net Worth = Assets – Liabilities

Why not go ahead and calculate your own using our Free Money saving Tool Net worth Calculator (Canadian Budget Binder 2012)

Financial numbers

When budgeting anything is possible, we are proof of that although we still have a long way to go in our journey.

These are our numbers and our goals, not a means of comparison towards your own goals to others target goals.

We don’t care how much money others make or if they have a high net worth or if it is lower than ours as it’s not a competition.

I hope our experiences will help guide you along your financial path working towards debt freedom.

Not everyone has the same path in life.

Some of you may have had to start over like I did or go to school a second time and now have OSAP loans to pay back.

Others may have divorced, lost money in the stock market or other investments, suffered job loss, fell ill or injured on the job and so on but you can’t let that stop you from achieving your financial goals.

Some of you may have been given trust funds, paid-for homes, paid educations or perks in life that give you a financial kick-start and that’s OK too.

Remember what I said, “It’s not about how much money you make, it’s how you save it”.

The only reason people accumulate wealth is because they know how to save or invest it wisely even if they did inherit money or win the lottery.

The smallest improvements should mean big strides in working towards reaching your goals.

Sometimes we have to fail in order to learn and we’ve all been there. 

Money can be an evil force for some people especially those who have a negative attitude towards their own financial situation.

I urge you to be optimistic and little by little with determination you too should see improvements, if you want that to happen.

Net worth updates 2018

Click the links below to read 2017 net worth updates to see how we made out following our own budgeting and investing rules.

That’s all for this month’s net worth update but please check-in at the beginning of  February 2019 to see how we made out in January 2019 with our financial portfolio.


It’s Not About How Much Money You Make It’s How You Save It

Don’t forget to Subscribe to CBB and Check out our > Monthly Budget Updates

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  1. I hope you can keep up with the updates. I find it quite interesting and I’ve learned a fair bit that will help me manage things down the road. My husbands health isn’t good as you know, we almost lost him last spring, so I’ve been working to be able to handles things alone when the enevitable happens. Plus I have guardianship over my Dads affairs and learning about investing in order to do the best I can for him. Again, eventually, I’ll be in sole charge of those funds after he goes. I’m in no rush, but I’m using this time to learn what I can to manage things better. You are one of the things I’m using to learn.

    1. Awe thanks Christine for your feedback I appreciate that. I don’t know how you do it all as I know you’ve had some challenging years that aren’t getting any easier. Chin up and keep doing what your are doing. There is never a bad time to keep on educating ourselves right? Mr.CBB

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